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requires a cost/benefit analysis that depends on the corporation's resources and
goals. A knowledgeable attorney can help the nonprofit corporation with this
decision.

Unfortunately, there is no government agency or private party charged with
enforcing a nonprofit corporation's trade name or trademark rights. Thus, a
nonprofit corporation will bear the costs of such action. Such enforcement may
require the corporation to hire an attorney and may be relatively expensive and
thus not a viable option. For many nonprofit corporations with limited resources, it
will be important to remember that, even if they obtain state and/or federal
registration, there is no guarantee that another party will not subsequently use a
similar trademark, or that another party will willingly stop such use. Because of this
situation, some argue that from a pragmatic point of view, the expanded rights
provided by state and federal trademark registrations are not as important to cash-
strapped nonprofit corporations that are mainly worried about their defensive
position. Although such registrations are always recommended if budgets permit,
they may be more useful to the nonprofit corporation that wants to strengthen its
offensive position, so that it has a better case when pursuing third parties to have
them stop using the same or similar trademarks.

CHAPTER 72. Ownership of Intellectual Property

There are many complicated rules regarding the ownership of intellectual
property, and a nonprofit corporation should seek the assistance of an attorney if it
has any specific questions, or if it is in a field that uses or develops intellectual
property extensively. In general, a nonprofit corporation should have a written
agreement with each of its employees and independent contractors regarding who
owns the intellectual property they may create. There is a somewhat

counterintuitive rule of law that holds that if a nonprofit corporation does not have
an agreement with an independent contractor regarding the transfer of intellectual
property ownership, then the intellectual property such independent contractor
creates (such as a brochure, a logo, or a web site) might be owned by the
independent contractor—even if the nonprofit corporation paid the independent
contractor to create it.

It can be very surprising for a nonprofit corporation to find that it may not be
able to freely modify and redistribute a brochure or web site that it paid for
because it did not have a proper intellectual property assignment from the
independent contractor who created it. Moreover, an “independent contractor” in
this case is not just an unrelated design firm or web site developer; it might be

WASHINGTON NONPROFIT HANDBOOK -256- 2018